Completing the Personal Budget: Guidelines & Explanation

Transcription

1 Preparing a Weekly or Monthly Budget These blank Budget forms are for your own personal use. They are designed to help you calculate the monthly expenditure costs of most items in your budget. You will not have an entry in every line. You may need to add new items to suit your own circumstances. There is also a section that will enable you to calculate Income. The totals from each section of Income and Expenditure should be transferred to the Summary Income/Expenditure section on page 6, which will show if you re working with a monthly surplus (income greater than expenditure) or deficit (expenditure greater than income). If you have a partner or children it is sensible to do a family budget and include them in the discussion as your draw up your budget. Remember that the Summary doesn t include payments to creditors (those you owe money to) so you may like to continue the process and review your financial situation completely. This is done by completing the sheets on pages 7 8 detailing your assets / investments, how much money you owe to your creditors and the normal monthly repayments to them. Completing the Personal Budget: Guidelines & Explanation Step One: Income First work out how much money you have coming in to your household each week or month using the table on page 3. You will need to decide whether weekly or monthly suits you best and stick to it throughout. When you are confident that you have worked out your Income, transfer the total onto the Summary Income/Expenditure Sheet on page 6. Step Two: Outgoings / Expenditure Now, work out how much money you have going out each week or month on household bills and for your basic living costs. The Expenditure forms on pages 4-6 will help you to do this. Use pencil, it is easier to correct mistakes and photocopy. Plan to make your priority payments first ( e.g. mortgage & other secured loans, rent, council tax, child support, Court fines, maintenance orders, County Court judgements, gas and electricity, Hire Purchase, TV Licence, Tax / National Insurance - if these are not collected by your employer and deducted from your pay). These can all be found in expenditure sections 1 & 2 on page 4. When converting a weekly income or expenditure figure into a monthly figure, multiply it by 52 and then divide by 12; When converting a quarterly expenditure figure into a monthly figure, divide it by 3;When converting an annual expenditure figure into a monthly figure, divide it by 12 If you are behind with any of these payments then contact the organisation concerned and Budget Pack Page 1 of 8

2 arrange to pay them before you do anything else. Put the amount of payments arranged on to your budget (use a spare line on page 4 to put in the agreed arrears repayments). Next look at your living costs and work out how much you need a week or month to live on. Complete expenditure sections 3 & 4 on pages 5-6. Your budget must meet your needs but show to the people you owe money to that you are not spending money on unnecessary things. Do not try to economise too much on food, as this will be difficult to manage over a long time. Do not put anything in your budget for debt payments such as catalogues, store cards, credit cards and unsecured loans as they should be put in the Creditor Information on Page 8. We have separated what you spend into four sections. This should help you to budget on an ongoing basis as you monitor what you spend money on. When you are confident that you have worked out a Household Budget you can live on, transfer the totals onto the Summary Income/Expenditure Sheet on page 6. Step Three: Comparison of Income against Expenditure On the Summary of Income/Expenditure section on page 6 subtract the Total Expenditure from Total Income to get Total Income Expenditure. If the Total Income Expenditure figure is positive you have a surplus. This will show how much money you have left over each week or month which is available to save or share between those who you owe money to (your creditors). If the Total Income Expenditure is negative you have a deficit (i.e. you do not have any money left after bills and living costs have been met). You will need to look at the budget again, to see if any realistic reductions can be made in expenditure. These can be added to the revised column. Step Four: Capital, Investments, Savings, Shares, Insurance Policies, etc. Complete the Assets/Investments section on page 7. Step Five: Creditor Information This information is to help you to know more about how much money you owe to Creditors. We need to consider priority debts (see priority payments on page 1) and other debts separately. Complete both sections on page 8. Step Six: Sit down and look at the situation This exercise of completing the Personal Budget may be the first time you have looked at all aspects of your personal finances at one time. You may be shocked or worried about the information you have written down. It is important to try and stay calm and talk to your family or a counsellor/advisor, as there may be several options open to you. Step Seven: If it all seems too much to cope with alone, contact a counsellor/adviser Take or send a copy of the forms you have completed to your counsellor/advisor and discuss with them the options open to you, or ring our free confidential debt helpline on Budget Pack Page 2 of 8

3 Budget - Income Income Wages/ Salary (net) Wages/ Salary net (spouse/partner) Other Wages and Salaries (net) Child Benefit Income Support Jobseekers Allowance Child Tax Credit / Working Tax Credit Attendance Allowance Disability Living Allowance Careers Allowance Maternity Allowance Statutory Maternity Pay Pension Pension ( spouse/partner ) Pension Credit Maintenance / Child Support Statutory Sick Pay Incapacity Benefit Bereavement Benefit Housing Benefit Council Tax Benefit Contributions (non-dependants) Contributions (lodger) Student Loan / Student grant Interest Income (Bank) Interest Income (Building Society) Other Income (Specify) Other Income (Specify) Total Income Budget Pack Page 3 of 8

4 Budget - Expenditure Expenditure 1. Housing Costs / Utilities Rent Mortgage Other Secured Loans / 2 nd mortgage Council Tax Mortgage Protection Premium Ground Rent, Service Charges, etc. Contents Insurance Buildings Insurance Mortgage Endowment Premium Other Life Assurance Water Charges Electricity Gas Oil / Paraffin Coal Calor Gas Total Housing Costs (1) 2. Other Important Items Telephone Mobile Phone Court Fines / Orders Maintenance / Child Support Pension / AVC payments Other Life Assurance HP / Conditional Sale TV Licence County Court Judgements ( CCJ ) Tax / National Insurance (if not collected by your employer through PAYE ) Total Important Items (2) Budget Pack Page 4 of 8

5 3. Everyday Expenditure Travel Work Travel - School Travel - Shopping Car Road Tax Car Insurance Car Fuel / Oil Car MOT / Maintenance Car Breakdown Cover Car Parking Charges Food / Milk Cleaning / Toiletries Newspapers / Magazines Cigarettes / Tobacco / Sweets Alcohol Laundry / Dry Cleaning Clothing / Footwear Childcare Nappies / Baby Items School Fees School Meals School Trips Pocket Money Dentist / Prescriptions / Glasses Care costs other than Childcare Health Insurance Pet Food Vet s bills / Pet Insurance Household Repairs Household maintenance / Redecoration Window cleaning Maintenance contracts Other Total Everyday Spending (3) Budget Pack Page 5 of 8

6 4. Other Expenditure Membership / Professional Subs Postage Hairdressing / Haircuts TV / Video / Satellite / Cable rental Other appliance rentals Pubs / Outings Lottery Hobbies ( e.g. gardening etc ) Religious & Charitable giving Gifts - Birthdays Gifts - Christmas Holidays CDs / Books Course costs / Fees Tuition Fees Other: Total Other Expenditure (4) Summary of Income/Expenditure Total Income Total Expenditure Total Housing Costs / Utilities (1) Total Other Important Items (2) Total Everyday Spending (3) Total Other Expenditure (4) Total Expenditure Total Income Total Expenditure Budget Pack Page 6 of 8

7 Assets/ Investments House / Flat ( Value of property minus mortgages outstanding ) Car / Motorbike ( Current value minus Hire Purchase or Conditional sales outstanding ) Savings: Tessa ISA Higher Rate Deposit Building Societies / Bank Savings Other Savings Endowment Policies Stocks & Shares ( current value ) Other: Budget Pack Page 7 of 8

8 Creditor Information (1) Priority Debts: Mortgages, Other Secured Loans, Rent, Fines, Utilities Hire Purchase, etc (for full list see priority payments on page 1). Creditor 1 Creditor 2 Creditor 3 Creditor 4 Creditor 5 Creditor 6 Creditor 7 Creditor 8 Creditor 9 Total Secured Debts Outstanding Balance Monthly Repayment Arrears Creditor Information (2) Other Debts: Unsecured Loans, Credit Cards, Store Cards, Overdraft, Family loans, etc.) Creditor 1 Creditor 2 Creditor 3 Creditor 4 Creditor 5 Creditor 6 Creditor 7 Creditor 8 Creditor 9 Creditor 10 Total Unsecured Debts Outstanding Balance Monthly Repayment Arrears Further copies of this budget pack can be obtained from: Credit Action, Howard House, The Point, Weaver Rd, Lincoln, LN6 3QN Tel: [email protected] Web: Reg. Charity No: Budget Pack Page 8 of 8